Specialist asset manager Intermediate Capital Group (ICG) saw its shares rocket today as it revealed it has raised €5.2bn (£4.7bn) for its latest private debt fund, the largest of its kind in 2017.
The fundraising, which gathered €4.2bn of new commitments for the London-listed firm, took place over just five months. It means that ICG now manages more than €27bn across its global strategies.
As with ICG's previous two Senior Debt Partners funds, the latest pool will be used to invest in senior secured loans to established corporates in the UK and Europe led by strong management teams.
“We’ve clearly seen a period of rapid expansion in direct lending over the last two years as the shift away from traditional bank lending continues,” said ICG's head of senior direct lending Max Mitchell.
“An important part of our approach is in ensuring we size the fund to meet the investment opportunities available. This same rigour has supported our ability to deploy the previous funds, despite some challenging market dynamics.”
Increasing competition was one of the key issues affecting the market, according to ICG, as low bond yields and interest rates have attracted more investors to alternative assets and encouraged more firms to establish.
But the firm was confident that it could stand out in the crowd. ICG's noted its previous €3bn fund, raised in 2014, is already more than 95 per cent invested across approximately 40 deals.
Less eye-catching results
The firm, which also offers private equity and real estate investment strategies, announced its first-half results today for the six months ending in September. They revealed group profit had dropped from £126.2m to £95.5m.
ICG noted that its fund management company profits were up 30 per cent year-on-year to £44.3m, although the investment company profits sank dramatically from £92.2m to £51.2m. According to ICG this was due to “lower investment income”, as the £92.2m from last year was swayed by the sale of a large asset.
The interim ordinary dividend shot up 20 per cent to 9p per share. Shares were up 10.06 per cent in lunchtime trading.